Workers Compensation Benefits

A workers compensation policy provides benefits to employees when they have an injury or accident on the job.

How do workers compensation benefits work for employers.

Who determines if and when WC benefits are paid?

Once an insurance claim has been reported to the insurance company, the doctors and carrier case manager will consult to determine the required treatment and time off needed for the employee to be released to work again. The insurance company will pay for the treatment directly and will also determine what wages should be paid to the employee. The average wages paid to injured employees who are unable to work is roughly two thirds of their average salary or hourly wage.
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Benefits of Workers Compensation

There are four basic types of workers' compensation benefits paid by insurance companies

Workers Compensation benefits are the payments an insurance company must make to the insured's employee or another party based on the terms of the insurance policy. Type of payments include:

  1. Medical benefits
    Pays for necessary medical care to treat work related injuries or illness.
  2. Income benefits
    Replaces a portion of any wages lost because of work-related injury or illness.
  3. Death benefits
    Replaces a portion of lost family income for eligible family members of employees killed on the job.
  4. Burial benefits
    Pays for some of a deceased employee's funeral expenses.

Some states also require an additional definition for disability benefits for workers compensation injuries.

Medical Benefits for Workers Compensation

Medical benefits are paid only for the treatment of your work-related injury or illness. The insurance carrier does not pay for the treatment of other injuries or illnesses, even if the treatment was provided at the same time you received treatment for your work-related injury. Your health care provider should not bill you (or carrier) for treatment related to a work-related injury or illness, but may bill you for treatment of other injuries or illnesses.

Employees may receive necessary medical treatment immediately after the work-related injury or illness. If your employer has elected to contract with a certified workers' compensation health care network (network), you may be required to obtain medical treatment through the network if you live within a network's service area.

A doctor may only request payment from you or the carrier when the work-related injury or illness has been reviewed by a case manager for dispute resolution, and the injury has been determined to be an injury or illness that is work-related.

It is beneficial, to all parties involved, if injured employees return to work as quickly as possible. Injured employees that continue to work as part of their recovery/treatment plan, in medically appropriate productive work, heal faster, and are more likely to retain their job skills. There is not always a specific end date for reasonable and necessary medical treatment for a work related injury. Getting employees back to work often costs less and helps reduce long-term insurance premiums caused by increased experience modifiers.

Income Benefits for Workers Comp

There are four types of income benefits:

  • Temporary income benefits
  • Impairment income benefits
  • Supplemental income benefits
  • Lifetime income benefits

Income benefits may not exceed the maximum weekly amount set by state law. Temporary income benefits, impairment income benefits, and lifetime income benefits are also subject to a minimum amount set by state law. Maximum and minimum benefit amounts are based on the state average weekly.

Employees must report any income (other than income benefits they may be receiving) to the Division of Workers' Compensation and the insurance carrier so an adjustment can be made to your income benefit payments. Employees may be fined and/or charged with fraud if they receive temporary income benefits while also receiving wages from an employer without notifying the Division of Insurance and the insurance carrier.

Income benefits are no longer payable following the death of an injured employee receiving income benefits. The injured employee's beneficiaries may be eligible to apply and receive death benefits if the injured employee's death was due to the work-related injury or illness.

Death Benefits for Work Comp Insurance

Death benefits can replace a portion of lost family income for dependents and eligible family members of employees killed on the job. Benefits may also be payable to parents when there are no surviving eligible dependent family members.

A beneficiary becomes eligible for death benefits the day after the employee's death. Death benefits end at different times depending on the beneficiary's qualifications to be entitled for this benefit. Death benefits may be paid if there is an eligible:

  • Surviving spouse
  • Dependent child
  • Dependent grandchild
  • Other eligible dependent family members such as parents may be eligible when there are no other surviving eligible dependent family members

Eligible Beneficiaries:

  • A spouse is usually eligible to receive death benefits for life unless he/she remarries. Upon remarriage, the insurance carrier will typically pay a two (2) year (104 weeks) lump sum payment
  • If there are minor children, the benefit is divided between the spouse and the minor children. One half is paid to the spouse and the other half is divided equally among the children
  • Eligible children can usually receive death benefits until age eighteen (18) or twenty-five (25) if enrolled as a full time student in an accredited college. If there is more than one minor child, as a child loses eligibility the benefits are re-distributed among the other eligible children
Burial Benefits Covered by Workers Compensation

Burial benefits are paid to the person who paid the deceased employee's burial expenses. The maximum burial benefit allowed is usually around $6,000 depending on individual state law.

A beneficiary becomes eligible for death benefits the day after the employee's death.

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Return to Work Programs Help Save on Premium

Injured employees who remain off work longer than is medically necessary are more likely to:

  • Develop complications that will lengthen their recovery
  • Become depressed
  • Focus on their pain and injury
  • Lose physical conditioning
  • Have higher claim costs

Employer should consider offering a Return to Work program when possible. Return to Work is set up by an employer to help injured employees go back to work quickly and safely while they heal. This can be done by either making changes to their regular job or placing them in a temporary or alternate work assignment that fits the restrictions as determined by their treating doctor. Employers should invest the time and effort in developing a Return to Work Program when possible.

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Workers compensation insurance is managed separately by each state in the U.S. Our agency helps business owners find more affordable employers liability insurance by shopping coverage with insurance companies that offer lower rates and more policy credits for coverage.

Private insurance companies have different appetites and underwriting guidelines depending on their performance in each state. Workers comp rates and pricing can vary tremendously from one carrier to the next. We want to help you find the very best deal on coverage in your state.

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